LPL Financial (LPLA) AI Stock Analysis

• Market Cap: $29.01B
• Dividend Yield: 0.32%
• Average Volume (3M): 636.21K
• Price to Earnings (P/E): 33.4
• Beta (1Y): 1.22
• Revenue Growth: 35.19%
• EPS Growth: -18.62%
• Country: US
• Employees: 9,118
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 5.20
• Shares Outstanding: 80,037,620
• 10 Day Avg. Volume: 940,099
• 30 Day Avg. Volume: 636,214
• PEG Ratio: 11.03
• Price to Book (P/B): 8.32
• Price to Sales (P/S): 1.97
• P/FCF Ratio: -85.61
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 2.05
• Enterprise Value/Gross Profit: 8.50
• Enterprise Value/Ebitda: 15.59
• 1Y Price Target: $430.54
• Price Target Upside: 16.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): 19.84
• Revenue Forecast (FY): $16.78B

• Rating: 66 Neutral
• Price Target: $387.00 ▲(4.40% Upside)

LPL Financial's overall stock score is driven by strong earnings call results and moderate technical analysis indicators. While financial performance shows growth, challenges in profitability and liquidity are concerns. The valuation suggests the stock is expensive, which could limit upside potential. The positive momentum from the earnings call and technical indicators supports a moderately favorable outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates robust business expansion and effective cost management, supporting long-term financial stability.

Successful Acquisition Integration

Successful integration of Commonwealth enhances LPL's market position and advisor network, contributing to sustained growth and competitive advantage.

Cash Management Account Launch

The new Cash Management Account simplifies client financial management, potentially increasing client retention and attracting new business.

Negative Factors

Declining Net Profit Margins

Decreasing net profit margins suggest challenges in maintaining profitability, which could impact future earnings and shareholder returns.

Negative Cash Flows

Negative cash flows highlight inefficiencies in cash generation, potentially limiting the company's ability to invest in growth opportunities.

High Interest Expense

Rising interest expenses increase financial burden, reducing net income and potentially impacting the company's ability to fund future growth.

LPL Financial Business Overview & Revenue Model

Company Description

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and auction rate notes. The company also provides advisory platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market programs; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services to trusts for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.

How the Company Makes Money

LPL Financial generates revenue through multiple key streams, primarily by charging fees for asset management and advisory services, as well as commissions from brokerage transactions. The company earns a significant portion of its revenue from advisory fees based on assets under management (AUM), which are recurring in nature and provide a stable income. Additionally, LPL collects commissions from the sale of various financial products, including mutual funds, ETFs, and insurance products. The firm also benefits from technology and transaction-based fees charged to advisors for using its proprietary platforms and services. LPL has established partnerships with various financial product providers, which enhances its offerings and contributes to its revenue through distribution agreements. Overall, the combination of fees from advisory services, commissions from transactions, and technology service revenue constitutes the primary drivers of LPL Financial's earnings.

LPL Financial Financial Statement Overview

Summary

LPL Financial shows strong revenue growth and improved gross profit margins, indicating effective cost management and business expansion. However, declining net profit margins and negative cash flows pose challenges to profitability and liquidity. The reduction in leverage is a positive sign, but the decrease in return on equity suggests a need for improved profitability.

Income Statement

LPL Financial has demonstrated strong revenue growth with a 10.22% increase in TTM, indicating robust business expansion. However, the net profit margin has decreased to 5.35% in TTM from 8.55% in 2024, suggesting pressure on profitability. The gross profit margin improved significantly to 43.37% in TTM, reflecting better cost management. EBIT and EBITDA margins have remained relatively stable, indicating consistent operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved to 1.53 in TTM from 1.96 in 2024, showing a reduction in leverage. However, the return on equity has decreased to 20.61% in TTM from 36.12% in 2024, indicating a decline in profitability relative to shareholder equity. The equity ratio remains stable, suggesting a balanced capital structure.

Cash Flow

LPL Financial's cash flow position is concerning, with negative operating and free cash flows in TTM, indicating potential liquidity challenges. The free cash flow to net income ratio is positive at 1.41, suggesting that despite negative cash flows, the company is generating cash relative to its net income. However, the operating cash flow to net income ratio is negative, highlighting inefficiencies in converting income into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.57B	12.39B	10.05B	8.60B	7.72B	5.87B
Gross Profit	3.76B	3.37B	3.05B	2.37B	1.71B	1.49B
EBITDA	2.05B	2.11B	1.99B	1.53B	936.43M	908.93M
Net Income	833.05M	1.06B	1.07B	845.70M	459.87M	472.64M
Balance Sheet
Total Assets	18.03B	13.32B	10.39B	9.48B	7.99B	6.60B
Cash, Cash Equivalents and Short-Term Investments	1.54B	1.01B	541.76M	884.28M	514.92M	818.36M
Total Debt	7.71B	5.75B	3.96B	2.95B	3.05B	2.59B
Total Liabilities	12.99B	10.39B	8.31B	7.31B	6.32B	5.28B
Stockholders Equity	5.04B	2.93B	2.08B	2.17B	1.67B	1.31B
Cash Flow
Free Cash Flow	-1.94B	-284.94M	109.33M	1.64B	237.15M	634.41M
Operating Cash Flow	-1.38B	277.59M	512.61M	1.95B	453.13M	789.94M
Investing Cash Flow	-3.17B	-1.59B	-860.19M	-376.40M	-458.64M	-187.50M
Financing Cash Flow	4.40B	1.42B	-208.53M	-504.27M	278.84M	-275.19M

LPL Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 370.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LPLA, the sentiment is Positive. The current price of 370.7 is above the 20-day moving average (MA) of 365.15, above the 50-day MA of 357.70, and above the 200-day MA of 352.51, indicating a bullish trend. The MACD of 2.30 indicates Positive momentum. The RSI at 54.37 is Neutral, neither overbought nor oversold. The STOCH value of 28.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LPLA.

LPL Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RJF	76 Outperform	$32.06B	15.83	17.64%	1.26%	6.45%	5.85%
IBKR	75 Outperform	$28.62B	30.96	19.82%	0.46%	11.88%	28.96%
SF	75 Outperform	$12.97B	22.50	11.73%	1.43%	7.54%	2.73%
SCHW	74 Outperform	$175.60B	23.18	17.05%	1.06%	5.90%	66.60%
TW	71 Outperform	$24.72B	35.70	10.51%	0.45%	22.17%	40.13%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
LPLA	66 Neutral	$29.01B	33.36	21.32%	0.32%	35.19%	-18.62%

LPL Financial Corporate Events

LPL Financial’s Earnings Call Highlights Growth and Challenges

LPL Financial Holdings Inc. recently held its earnings call, revealing a generally positive sentiment. The company celebrated significant achievements such as record-breaking assets, robust organic growth, and the successful integration of Commonwealth. Despite these accomplishments, challenges like high interest expenses and reduced adviser movement were acknowledged. However, the overall sentiment remained optimistic, with growth metrics and achievements outweighing the challenges.

LPL Financial Reports Q3 2025 Results Amid Strategic Growth

LPL Financial Holdings Inc. is a prominent wealth management firm in the U.S., supporting over 32,000 financial advisors and managing approximately $2.3 trillion in assets. The company offers a variety of investment solutions and fintech tools to help advisors run successful businesses.

LPL Financial’s Earnings Call: Record Assets & Growth

LPL Financial Holdings Inc. recently held its earnings call, showcasing a strong financial performance marked by record total assets and significant organic growth. The company also highlighted successful acquisition strategies. Despite these achievements, challenges such as increased interest expenses, reduced trading volumes, and slower adviser movement due to economic uncertainty were noted. Overall, the sentiment was positive but cautious.

LPL Financial Completes Acquisition of Commonwealth Financial

On August 1, 2025, LPL Financial Holdings Inc. completed its acquisition of Commonwealth Financial Network, a wealth management firm with around 3,000 advisors managing $305 billion in assets. This acquisition, initially announced on March 31, 2025, is expected to enhance LPL’s service offerings and market position by integrating Commonwealth’s premium service culture and award-winning advisor experience. Commonwealth will continue to operate as a wholly-owned portfolio company, with its CEO Wayne Bloom joining LPL’s management committee. The onboarding of Commonwealth advisors to LPL’s platform is anticipated to be completed by the fourth quarter of 2026.

The most recent analyst rating on (LPLA) stock is a Buy with a $397.00 price target. To see the full list of analyst forecasts on LPL Financial stock, see the LPLA Stock Forecast page.

LPL Financial Reports Strong Q2 2025 Results

LPL Financial Holdings Inc. is a prominent wealth management firm in the U.S., providing a range of financial services and solutions through its extensive network of financial advisors and institutions. In its second quarter of 2025, LPL Financial reported a net income of $273 million, with diluted earnings per share of $3.40, marking a 5% increase from the previous year. The company’s adjusted EPS saw a significant rise of 16% year-over-year, reaching $4.51. LPL Financial’s total advisory and brokerage assets surged by 28% to $1.9 trillion, demonstrating robust growth in its core business operations. The firm also announced a series of strategic moves, including the onboarding of First Horizon Bank and the acquisition of Commonwealth Financial Network, which is expected to close soon. Despite a 24% drop in recruited assets to $18 billion, the company maintained strong organic growth with $21 billion in net new assets. Looking ahead, LPL Financial remains optimistic about its growth trajectory, supported by its solid financial foundation and strategic initiatives aimed at enhancing long-term shareholder value.